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Colorado trial courts are not required to blue-pencil non-compete and non-solicit covenants

Even where an agreement says that covenants “shall be” blue-penciled (meaning, rewritten if determined to be unenforceable and narrowed to whatever the court rules would have been enforceable), a trial court in Colorado is not required to do so. In a recent decision, 23 LTD v. Herman, case no. 16CA1095 (Colo.App. 7/25/19), the Colorado Court of Appeals confirmed blue penciling is within a trial court judge’s discretion. The parties cannot, by way of mandatory language like “shall,” not only confer on the judge the authority to re-write their agreement but an obligation to do so.

Simply put, the court is not a party to the agreement, and the parties have no power or authority to enlist the court as their agent. Thus, parties to an employment or noncompete agreement cannot contractually obligate a court to blue pencil noncompete provisions that it determines are unreasonable.

The case is a strong reminder for employers not to over-reach when drafting covenants, non-competes or non-solicits. While a blue penciling clause may give the judge to make some changes like reducing the geographic or temporal reach of the covenant (how many miles/how many months), the parties should not expect a judge will be willing to make changes beyond that, or even of that nature. Whether to blue pencil at all is an issue for each judge.

Fundamentally, it is the obligation of a party who has, and wishes to protect, trade secrets to craft contractual provisions that do so without violating the important public policies of this state.[5] That responsibility does not fall on the shoulders of judges